Higher-education slipping, U.S. at risk, UNC chief says

RALEIGH, N.C. —America is shortchanging and devaluing public colleges and universities, putting the nation at risk in the global economy, the head of the University of North Carolina system says.

Americans increasingly see colleges and universities as “nothing more than factories that must demonstrate an immediate return on investment for consumers,” Tom Ross, president of the 17-campus UNC system, said in a speech to the National Public Affairs Forum of the City Club Raleigh.

But America is forgetting that the job of higher education is to prepare students to think on their own and work together, and to develop them as leaders and foster life-changing research, Ross said March 10 in the Forum’s inaugural lecture.

States are shifting costs to students and families, putting higher education out of reach for many or saddling them with debt, he said.

States also are cutting spending and losing faculty, along with their research dollars and the jobs they create, he said.

“I have come to the conclusion that America is losing her way with regard to higher education,” he said.

Eroding investment

America’s greatness is rooted in its higher education system, the best in the world, said Ross, who will step down next January after five years on the job, forced out in a move this past January by the UNC Board of Governors.

Yet enrollment is outpacing investment in higher education, which increasingly is focusing on “metrics, return on investment, and job preparation,” he said.

While America spends only two percent more on higher education in real dollars than it did 25 years ago, he said, enrollment has ballooned by over 60 percent, resulting in a 30 percent decline in spending per student.

“As a nation, we are disinvesting in higher education, and we are beginning to pay the price,” he said.

Bloomberg recently reported unemployment among college graduates had declined to 2.8 percent, he said, and it warned America was at risk of “not producing enough college graduates to meet its workforce needs.”

Falling behind

Other countries are making big investments in higher education, while the rankings of U.S. institutions decline and America’s “premier status as the place to be educated is fading,” Ross said.

What’s more, he said, the cost of higher education is rising beyond the means of many Americans.

“Growing numbers of American students can’t afford to attend college at all, and too many of those who do are burdened by significant debt,” he said. “This is a dangerous trend in my view.”

Wrong direction

In half the states, students at public universities pay more toward the cost of their education than the state does, down from only three states in which that was the case in 2000, Ross said.

“We are moving in the wrong direction,” he said. “America must educate more people if we are going to compete successfully in the global economy.”

The U.S. and North Carolina “must ensure that college remains affordable and accessibility to everyone who has the ability and desire to pursue it,” he said.

N.C. bucks trend

North Carolina, Ross said, has shown stronger support of its public universities than most other states.

In-state tuition rates for UNC campuses are in the lowest fourth among their public peer institutions in other states, with rates at many UNC campuses the lowest or next-to-lowest, he said.

As a result, he said, UNC students generally graduate with less debt than students in most other states.

Accessibility, efficiency

Keeping college affordable and accessible in the U.S. “will require renewed and sustained investment” in public systems of higher education, as well as greater operating efficiencies “without sacrificing the quality of education,” Ross said.

He said the UNC system is looking at ways to share services such as those to determine students’ residency and handle financial aid and audits. It also is looking at ways to conserve energy; streamline academics and operations; provide college e-purchasing; and make information-technology more efficient.

The UNC system, which employs 60,000 people — more than any private enterprise in the state — has eliminated hundreds of positions, and is producing 18 percent more graduates than it did five years ago while spending 15 percent less per degree, adjusting for inflation, Ross said.

“Very few businesses can boast that kind of increase in production along with that level of cost reduction,” he said.

Yet while the UNC system always can become more efficient, he said, an ongoing concern is that greater efficiency could “begin to erode the excellence” of educational opportunities campuses offer.

Spending cuts

In his four years as UNC system president, Ross said, he has managed continuing budget cuts, including $400 million in 2011, the largest cut in UNC’s history, and faces more cuts in the budget proposed this year by Gov. Pat McCrory.

With few exceptions, he said, UNC system faculty and staff have had only two salary increases, averaging about 1.5 percent, in the last six years.

“Without great faculty, you cannot be a great university,” he said.

And in their exodus to private industry and other institutions, he said, faculty often take federal research funds with them.

“This is a dangerous trend for North Carolina and one we must address,” he said.

Research dollars

While industry in the U.S. historically conducted its own research and development, Ross said, universities now account for roughly 75 percent of research in the U.S.

Public and private universities in North Carolina generate over $2 billion in research grants and contracts a year, including $1.2 billion at UNC campuses.

Those grants and contracts support over 22,000 jobs throughout the state and, over the past 10 years, have generated more than 135 spin-off companies, Ross said.

North Carolina State University alone has over 700 corporate partners, he said.

While research may be important to business, Ross said, it is even more important as a teaching tool.

“We must help people understand that today research is an integral part of teaching at both the undergraduate and graduate levels,” he said. “At its core, research is another form of hands-on learning.”

Economic impact

The UNC system enrolls 220,000 students from all 100 North Carolina counties, nearly all 50 states and numerous foreign countries, and operates with an annual budget just over $9 billion, including $2.3 billion from the state, making it the 11th-largest industry in North Carolina, Ross said.

A recent study found the UNC system creates $27.9 billion of added economic value for the state’s economy, he said, representing 6.4 percent of the state’s annual gross domestic product, or the equivalent of creating 426,000 new jobs.

Shortage of teachers

The UNC system has a responsibility to help prepare teachers for North Carolina’s schools, which face a “looming crisis” in the pool of teachers, Ross said.

Enrollment in UNC schools of education fell 12 percent last year and has plunged 27 percent over the past five years, he said.

At the same time, the state is losing veteran teachers “at an alarming rate,” he said.

“This is a recipe for disaster,” he said. “We must find effective ways to attract the best and brightest into teaching, and retain them once we invest in training them.”

Valuing higher education

The value of higher education “is not fully measured by one’s job title or earnings level,” Ross said. “Higher education has value beyond the individuals who participate in it that extends to the public at large.”

The U.S. must reverse its 25-year trend and “begin investing again in our public universities, in their faculties and students, in teaching and learning, and in research and discovery,” he said.

“I am convinced that if we increase educational attainment in North Carolina, we will have fewer people in poverty, there will be less demand for social services, fewer people will end up in our correctional system, more people willhave better health outcomes, and we will have stronger communities with more civically engaged residents,” he said. “Education is the great equalizer. It is the pathway to opportunity.”

Raising awareness

Efforts to educate policymakers about the “importance of education to the fabric of our society” must be aggressive, Ross said.

Higher education, both public and private, has driven the U.S. economy to become the strongest in the world, he said.

Higher education will prepare America’s business and community leaders, he said, to “produce the talent we need to win the economic competition we face globally,” and “preserve and protect our democracy.”

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